Venice Is Now a Crypto-AI Unicorn — But Its Token Tanked 50%

**David Canellis** (0:00)
Welcome back to The Breakdown, everybody. I'm your host David Canellis, as always. Today, we're going to be talking about tokens and equity because of all this stuff with Venice, the permissionless, privacy-focused AI terminal, is, yeah, been under fire because it raised $65 million and valuing the company behind the VVV token at $1 billion.
Well, at the same time, there's this VVV token floating around, and the market has kind of rejected the token post-equity raise, and it's raised some questions over, why do we need this token at all? Why can't equity and tokens be the same thing?
Also, a bunch of growth numbers surrounding Venice that I thought might warrant a closer look.
Without further ado, this is the topic for today. Let's get to it. This is The Breakdown.
Nothing is said on The Breakdown as a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone on the show are opinions, not financial advice. Hosts and guests may hold positions in the company's funds or projects discussed. Okay, so we're gonna keep this quite focused because there's been quite a lot spoken about this already. And if you want a decent conversation about all of this, it's worth tuning in to The Empire Podcast, the most recent episode with Blockworks co-founder Jason and Rob Haddock, partner at Dragonfly Capital, who has led this raise. And they kind of go into the nitty-gritty over some of the decisions made and really the state of play of the situation of tokens and equity. But to give you a broad overview, if you're not familiar with Venice, I mean, I have it up on my screen here. It's essentially a terminal.
It's essentially an AI router for you. So you don't have to buy the VVV token to use the platform. You have a certain number of free credits, the same as ChatGPT and so on. But what you can do is purchase VVV and state it. What that allows you to do is essentially lock in the price of your compute. So if you purchased 1% of the VVV supply right now, state it, you will receive in perpetuity 1% of the total Venice compute. So it's a way of hedging your future compute costs by getting in early. And there's some other things as well that you get access to. You get access to a pro account and all that kind of thing. So there's perks and everything like that as well, but that is the primary utility of VVV. It's worth jumping on to the platform and playing around and seeing how it works. Now the company itself, it's not like it's a fully decentralized company. It's a centralized company and it's also a centralized service. It's not like Venice runs on a blockchain or anything like that. It's just purely the token that is really the intersection of Venice and crypto. And it does interact with the near blockchain as well, but it's not like the whole protocol is a decentralized protocol. It's launched on on blockchain rails or anything like that. So it's important to get that out of the way. VVV is not a governance token for a DAO or anything like that. It's purely a utility token as a way to access compute. And if the cost of compute is destined to go up as many people think it will, then the utility, primary utility for you as a user is to essentially get a discount on future compute costs if you outlay it right now. That's kind of the idea. The token itself launched over a year ago in January 2025 via an airdrop to early users, but you can see on my stream that it was an immediate dumping. And there was a lot of controversy at the time for Venice insiders and market makers that were connected to the initial launch, initially sold a lot of their tokens and kind of made a killing on the way down. Since then, we've had a long period of price discovery. And up until the point last week that we have this reveal from founder Eric Voorhees, a long time Bitcoin entrepreneur from ShapeShift. He has come out with this raise on July the 1st. So here on my screen, you can see that on July 1st, the market essentially peaked. There was a little bit of a rally upwards following the equity raise. And then once the market kind of figured out that token holders were not going to immediately benefit or there was no real benefit for token holders from the equity raise, it became clear that there is this dichotomy between venture capital investors' equity, the company itself, and then token holders who are kind of left holding the bag. In the meantime, we've seen the market reject VVV somewhat. So it peaked to 2082, two days after the raise, and since then, it has dropped basically almost 50% from 2082, all the way down to a current price of around 1158 So almost a 50% drop on the back of news that should be good news for people who are interested in gaining financial exposure to the growth of the Venice platform. So what is the raise? I mean, why raise it all?